Legislation to Delay Payment Cuts May Preserve Rural Access to DME

People are worried that cuts to Medicare payment rates for durable medical equipment (DME) will prevent beneficiaries living in rural areas from accessing the medical equipment they need because suppliers may not be able to afford to provide services at the soon-to-be-implemented rates. But pending legislation may offer some relief.

The reimbursement cuts are related to the Competitive Bidding Program (CBP) that was part of the Medicare Modernization Act of 2003. The CBP started expanding to rural areas in January of this year, and the related reimbursement cuts will be in full effect by July 1, 2016. However, legislators from the U.S. House of Representatives have introduced a bill that would delay Medicare’s reimbursement cuts until Oct. 1, 2017. (1) The intention, according to a press release from the bill’s sponsor, Congressman Tom Price, M.D., is to “ensure that DME providers are able to continue to meet the needs of Medicare patients and ensure that beneficiaries have access to quality items and services in all parts of the country.” (2)

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The bill, called the “Patient Access to Durable Medical Equipment of 2016,” or “PADME Act” for short, was introduced to the House on May 12. A similar bill was introduced to the U.S. Senate in March. The PADME Act (H.R. 5210) would help in a few ways (3):

1. Extend the current DME reimbursement rates in non-competitive-bid areas and extend the transition to new payment rates under Medicare
2. Require CMS to report monthly on the CBP’s impact to beneficiaries’ DME access and health outcomes
3. Require CMS to consider factors like travel distance, delivery time, number of suppliers in the area, etc., for rural patients
4. Set the bid ceiling at the fiscal year 2015 fee schedule rate

So where does this leave you, as a supplier? If legislation isn’t passed, then suppliers and Medicare beneficiaries in rural areas will be negatively affected. But whether or not the PADME Act is passed as legislation, you will need to prepare for the upcoming changes.